The cashless man of India

A Visa employee shares what he learned after giving up cash for 200 days

Could you live without cash for a week, a month, a year? Visa’s Abhishant Pant, described by local news as “The Cashless Man of India,” challenged himself to prove it is possible to live without cash where he lives in India. Here, he shares his experience after 200 days on his cashless journey.

By Abhishant Pant, Head Prepaid and New Channels, Visa India and South Asia.

As I shared my idea to undertake an experiment in which I would stop using cash and use only digital forms of payment, my colleagues at Visa said going cashless in India would be impossible and that I wouldn’t be able to manage for more than a week.

I started with the fundamental question, “As a believer in the digitization of cash, am I just propagating the theory, or do I really understand the consumer side of the story?” With this began my quest to understand “cashlessness” first hand. Many times the challenges looked insurmountable, but then what is the point of a journey if it doesn’t challenge you?

The first phase of the journey started in Singapore, where I traveled without carrying Singapore dollars and lived without the physical manifestation of money for five days. I paid for every transaction using a card—and it was not easy. Every time I boarded a cab or entered a restaurant, I had to ask if they accepted cards. As I completed the phase successfully though, a friend posed the question, “Singapore is a city nation. Do you think you can live without cash for a month in India?"

Thus on March 13, I started my 200 days of “living without cash” journey in Mumbai.

Having long conversations with neighborhood Kirana stores (mom-and-pop neighborhood grocery stores) on the benefits and challenges of cashlessness.

Overall the journey was made possible by the “app economy,” created by nimble startups that provided great support and took care of my retail financial transactions.

Below are some of my key learnings from my cashless journey:

Transit will be the anchor driver of cashless. At least in large cities, buses, cabs, trains and automobiles are low cost but experience high frequency and high impact. The one who wins this will win consumer mindshare and wallet. In cities like Mumbai, where daily commuters take multiple types of transit to reach their workplace, transit is the one solution that impacts them the most.

Services could be converted to digital with minimal effort. I used a total of 18 services, ranging from grocery delivery to domestic help, with the support of hyperlocal startups, so getting food delivered at home was not a big challenge.

We need a solution for those without smartphones. India has crossed one billion mobile phones, but almost 80 percent are not smartphones. Clearly, feature-driven phone solutions with low costs are required to get India or anywhere else in the world to evolve and reap the benefits of a “mobile first” financial inclusion revolution.

We need solutions that cater to regional languages. My maid is a Maharashtrian. My grocery shop owner is a Gujarati. My newspaper vendor is from UP. They all need a solution in their regional language—and the absence of it acts as one big hindrance on the way to adoption.

We need a bit of hand-holding. Both Bharat (a.k.a. rural India) and less tech-savvy India need hand-holding at every step to graduate from beginner to domain expert. My maid had never visited an ATM machine in her life, so I had to accompany her to teach her how to operate the machine.

We need sustainable growth of wallet solutions. The current mobile wallet providers flush with venture capital funds have helped a larger number of Indians adopt a new way of transacting. They have also forced banks to innovate and come up with their own wallet solutions, with consumer experience and convenience at the center of everything they do.

Retail Kirana merchants, or small businesses in general, need incentive to get on board. This is a tough category to crack. They have multiple questions to solve before embarking on this journey:

a. Will it increase foot traffic? b. Will it increase consumption from the same consumer? c. What are the tax implications, and are the above benefits good enough to make them overlook the tax cost?

Street vendors need incentives too. None of the current digital cash options are cost-effective (cost of transaction + cost of a device) enough to work with this segment.

Anyone can go 95 percent cashless. I was able to use non-cash payments for all retail transactions, except at street vendors so it is possible to be mostly cashless most of the time.

According to the United States Agency for International Development (USAID) report “Beyond Cash: Why India Loves Cash and Why that Matters for Financial Inclusion,” an overwhelming 97 percent of retail transactions in India are in cash. So what would happen if those transactions moved from cash to cashless? Digitizing payments and moving to a less-cash society will bring benefits to the economy, including reducing the prominence of the “underground” or black economy; contributing to the gross domestic product and job growth, and reducing the cost to produce paper money, for example.

This is clearly a once-in-a-lifetime opportunity to get a significant number of people under the financial inclusion umbrella sustainably and profitably. The Indian government is already moving to positively impact electronic payments acceptance both at the consumer and merchant levels as cited in recent whitepapers on the subject. However, not everything associated with a cashless environment is perfect. Outages can pose a serious problem and while we head toward a less-cash and eventually a cashless society, the belief is that the system will evolve in such a manner that it will have robust business continuity and consumer grievance redressal plans to ensure that the benefits outweigh the system failures.

Finally, the biggest guarantee of a cashless society is the confidence in an alternative that will be always accepted, anywhere you go. Cashless leads to greater benefits to the excluded than the included, so when you go cashless, you impact lives in more ways than you can imagine. For me, the journey continues…

Abhishant Pant is based in Mumbai and the above findings are based on his personal experience of going cashless. For more details on his journey, follow him on LinkedIn, where he writes in the public domain as “Founder: Cashless Journey.”